TRINITY BUSINESS SCHOOL

Cover Sheet

Student: Kevin Albert

Student number: 23339860
Module: Business Ethics
Module Code: BU7711
MSc Programme: Operations & Supply Chain Management

This sheet must be attached to your submission. The onus is on the student to keep a copy
of all submissions.

I/We have read and understand the plagiarism provisions in the General Regulations of the
University Calendar for the current year, found at: http://www.tcd.ie/calendar

I/We have completed the Online Tutorial on avoiding plagiarism ‘Ready, Steady, Write’,
located at http://tcd-ie.libguides.com/plagiarism/ready-steady-write

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Declaration

I/We declare that this work has not been submitted as an exercise for a degree at this or any

other university and it is entirely my own work.

I have read and I understand the plagiarism provisions in the General Regulations of the

University Calendar for the current year, found at http://www.tcd.ie/calendar.

Generative AI Declaration
Please choose A or B with regards to your use of ChatGPT & other generative AI tools
in this project:
A. Nothing to declare. I did not use ChatGPT or any other generative AI
software. (see note)
B. I used ChatGPT or other generative AI software (see note)
NOTE:
 If you answer A and the corrector/supervisor, finds evidence that you have indeed
used ChatGPT, this behaviour will be considered as unethical and you will be
penalized accordingly with reference to the TCD policy on plagiarism.
 If you answer B, please clearly explain for which chapters or parts of your
dissertation you used ChatGPT and how it helped you to improve your learning
process within ethical guidelines. You may include your answer – 300 to 600
words approx.- in the appendix.

Date: 21/Nov/2023

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Table of Contents
Introduction .......................................................................................................................... 4
About Quijotekaffee............................................................................................................... 4
Issues in the coffee supply chain ............................................................................................. 4
Sustainability ......................................................................................................................... 5
Triple Layered Business Model Canvas ............................................................................... 5
1. Economic Layer of TLBMC ..................................................................................... 6
2. Environmental Layer of TLBMC ............................................................................. 7
3. Social Layer of TLBMC ........................................................................................... 9
Conclusion........................................................................................................................... 12
Reference ............................................................................................................................ 12

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Question 2
In how far is Quijotekaffee enacting sustainable supply chain management practices?

Introduction

Human activities push the planet towards a series of critical thresholds (Barnosky et al., 2012).
In an era where environmental awareness merges with business strategy, firms across the globe
are reworking their operations to align with sustainable and circular principles. Coffee is the
3rd most consumed beverage in the world after water and tea. In terms of value, coffee is
second after crude oil and recently the trend of sustainability in coffee has been generated by
simultaneous global shifts around environmental, social and economic factors (Nawon, 2023;
Bilfield, 2022).
Quijotekaffee is one such company that applies these practices to its operations. This essay will
be two-fold first, we will briefly discuss issues in the coffee supply chain then we will
understand the concepts of Sustainability in Supply Chain Management (SCM) by
implementing The Triple Layered Business Model Canvas (TLBMC). Quijotekaffee will be
used as a case to understand TLBMC in detail. To provide a strong foundation we must
understand Quijotekaffee and what makes them stand out.

About Quijotekaffee

Quijotekaffee is a Germany-based coffee company founded in 2010 to be an “economic

efficient business” focusing on transparency and sustainability (Tea & Coffee Trade Journal,
2019). They only import coffee from producer communities which are certified organic, they
address them as cooperatives or co-ops. These co-ops are spread across 6 countries - Ecuador,
Honduras, Peru, Guatemala, India and Brazil (Quijotekaffee, n.d.). They strive to maintain
competitive prices as profit is not their main focus and they do not want customers to choose
other brands based on prices.
Before looking at how Quijotekaffee enacts sustainable SCM practices, let us look at some of
the issues in the industry.

Issues in the coffee supply chain

Unfortunately, being one of the most consumed beverages in the world comes with huge
environmental and social impacts. Table 1 highlights some of these issues.

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 Issues Impact

Deforestation The sun-grown method of growing coffee depleted the soil's nutrients. As
the demand for coffee grew it was much more profitable for companies to
clear forests for cultivation of coffee. Deforestation creates ecological
imbalance and plays a major role in the extinction of species.

Water Coffee production is water-intensive. It is estimated that 170 litres of water

Consumption are used to brew one cup of coffee.

Labour Growing coffee is a long and labour-intensive process. There is a lack of

Exploitation transparency in the coffee supply chain making it vulnerable to unethical
practices. It has been reported that farmers only make 1-3% of the retail
price, in these cases, sustainability becomes an afterthought as they are
forced to meet quotas to make a living.

Table 1: Sustainability problems in the coffee supply chain (Ilgar, 2022).

Sustainability

Sustainability is ensuring that the present generation meets its needs without compromising the
needs of future generations (United Nations, n.d.) or the balance between the three layers -
people, the planet and profits. The TLBMC is one such tool which can help businesses design
a more sustainable business model.
The preference for sustainability over a circular economy lies in the holistic approach provided
by sustainability. While circularity focuses on reducing waste and environmental impact,
examining sustainability by using TLBMC allows for a comprehensive analysis of both
environmental and social layers. This makes it easier to suggest improvements.

Triple Layered Business Model Canvas

The TLBMC extends on Osterwalder and Pigneur (2010) original business model canvas
(BMC). Although the BMC serves as an excellent tool for helping people understand business
models, it lacks emphasis on the importance of environmental and social sustainability; some
say the canvas focuses on profit (Joyce & Paquin, 2016). This is where the more sustainability-
oriented business model TLBMC comes into the picture. By building on the traditional BMC,
not only does TLBMC help understand each layer of the TBL horizontally (by itself) i.e. how

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a company makes money, affects the environment and treats people, but also vertically (how
layers are interconnected) i.e. how making money can affect the environment and how ethical
practices can contribute to the financials (Joyce & Paquin, 2016).
The following section delves into the environmental and social layers, each comprising nine
components: the explanation for these draws inspiration from Joyce and Paquin's (2016) work.
Utilising the Quijotekaffee business model as a case study will enhance understanding of
components and help understand how they are enacting sustainable SCM practices. Data for
all components under the three layers come from company reports, articles and press releases
which are available on the Quijotekaffee website.

1. Economic Layer of TLBMC

An overview of the economic layer of Quijotekaffee can be seen in Figure 1. In summary,

Quijotekaffee focuses on the production of high-quality and needs-based products while taking
ecologically and socially sustainable aspects into consideration. 50% of their sales are through
business customers (Bars, Restaurants and Companies), who also receive a small discount as
it is easier to bill and pack large orders. The other 50% is sold through their website and brick-
and-mortar stores to private customers. Some of the costs associated with this are import,
packaging, administration etc. Paying the corporations more than the market price is a huge
part of their costs.
Partner Activities Value Customer Customer
Cooperatives Importing Proposition Relationship Segment
Roasters Sourcing Green coffee Newsletters Business
Supplier visits or Social media Private
supplier engagement High quality and
Packaging authentic coffee
Roasting
Resources Full financial Channels
Partner relationship responsibilities Website
Brand Brick-and-mortar store
Costs Revenues
Pre-financing & Buying Transportation Coffee Sales Coffee School
Processing Packaging Accessories sales Book Sales
Administration

Figure 1: Economic Canvas Osterwalder and Pigneur (2010)

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 2. Environmental Layer of TLBMC

An overview of the environmental layer can be seen in Figure 2. The environmental layer of
the TLBMC is to highlight how the firm generates more environmental benefits than impacts.
This gives a clear understanding of where the biggest environmental impacts lie and provides
insights into where to focus attention. Each element aids in analysing the performance of a
company, these elements are elaborated upon by using Quijotekaffee as an example.

Functional Value

It is a way to measure what a product archives in a quantitative manner.

The functional unit for Quijotekaffee will be one bag of coffee, while the functional value is
the total consumption of this coffee by end customers.

Materials

This refers to the physical product used to deliver the functional value. There are a lot of
materials used in a finished product and it is not practical to add all materials to the canvas, it's
important to identify the key material and how it affects the environmental layer.
Materials for Quijotekaffee are coffee beans which are produced sustainably and packing
material. In addition, coffee is packed in plastic bags. However, a closer look reveals the use
of bags made from mono-PE is entirely recyclable. PE is much easier to recycle as it does not
need any water or materials and incarnation does not produce any harmful substances (Von
Oerthel, 2022).

Production

Production may involve agricultural production and converting raw materials into finished
products.
For Quijotekaffee, coffee is cultivated by their cooperatives, who only deliver coffee which is
graded between 84-85 SCA (Specialty Coffee Association) points. They also limit themselves
to 150 tonnes of coffee a year, which helps them to improve the quality of coffee and avoid
wastage.

Supplies and Outsourcing

This represents all other materials and production activities that are necessary for the functional
value but not considered core to the organisation. Such as utilities which are likely coming

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from other companies in this case, the firm has little influence unless they have in-house
facilities.
For Quijotekaffee, enough information is not available to make a conclusion.

Distribution

Distribution involves the transportation of goods and issues of packing and logistics play a big
part here.
Quijotekaffee has an import team that works directly with shipping companies that transport
goods through sea freight and trucks. They ship finished goods within Germany and Austria
through DHL, which is known to use electric transportation methods that reduce CO2
emissions (DLH, n.d.). They charge 6€ delivery fees and give discounts if quantity ordered is
increased.

Use Phase

This component looks at how a consumer uses a firm's products.

As Quijotekaffee sells whole roasted beans the first use-phase for customers is using electricity
to grind the beans, next is water usage to make the coffee.

End of Life

The end of life is when customers decide to stop using the product this often means addressing
issues of recycling or reusing.
For Quijotekaffee, end-of-life means addressing the impacts of their packaging material.
Although they use entirely recyclable packaging, the lack of information about reusing or
recycling processes hinders a precise analysis.

Environmental Impact

While the BMC helps address the cost, the environmental impact component extends onto that
to address the ecological cost. This helps the firm to focus on its biggest environmental impacts.
For Quijotekaffee, their environmental impact can be shipping coffee from their cooperates to
Hamburg. Without carbon footprint data this becomes difficult to analyse.

Environmental Benefits

This element builds on the concept of value creation beyond financial gain. It helps to establish
value creation through environmental impact reduction.

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Transparency is a crucial aspect as it makes it clear to stakeholders how Quijotekaffee
environmental concerns. They are known to partner with suppliers who are certified organic,
or Chakra certified (known as a sustainable form of cultivation). The Quijotekaffee team is
always looking for feedback and input on how operations can be more environmentally
sustainable. However, due to the lack of analytical data, it becomes difficult to quantify the
argument.

Supplies & Production Functional End-of-Life Use Phase

Outsourcing Production of Value Coffee bag end of Coffee grinding
Utility usage at coffee. Usage of one bag life. (energy).
company. Roasting coffee. of coffee. Used coffee.
Materials Distribution
Coffee beans DHL.
Plastic bags. Sea Freight.
Environmental Impacts Environmental Benefits
Shipping coffee from co-ops to Hamburg. Organic Coffee Production.
Figure 2: The environmental layer of the triple layered business model canvas demonstrates
the Quijotekaffee case.

3. Social Layer of TLBMC

Using the social layer of the TLBMC helps to see the social impacts of the company on its
shareholders (Figure 3). Each element under this layer provides a better understanding of where
the company's social impacts lie and provides insight to improve social value creation.

Social Value

This is about creating benefits for stakeholders and society.

For Quijotekaffee, it is done by the production of high-quality and needs-based products.
Combined with their long-term relationship with their cooperatives, which in some cases are
nearly 10 years long. This commitment to social value is evident as they make sure that the co-
ops get the bigger slice of the pie as they work the most.

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Employee

This component helps to consider the role of an employee. This may include things such as
wages, equality, working conditions, relationships etc. This also provides an overview of the
employee development programmes.
The Quijotekaffee team consists of 15 members, who have based their wage on the average
wage which is limited to 5000€ per month. The firm pushes to join regular training courses
while providing monetary support. Because of the non-hierarchal process, employees can share
ideas and knowledge.

Governance

The governance component encompasses a firm's structure and decision-making policies, it

outlines how an organisation identifies and engages with stakeholders.
Quijotekaffee is very transparent with its structure, as all decision-making is done by consensus
and all members have the right to inspect all operational data whenever needed; they only
collaborate with peasant farming structures. They do not have a capitalist mindset and any
remaining profits are either reinvested or donated.

Communities

If a firm has operations in many countries, it is important to consider every community. While
many companies are only developing communities next to their HQ they should focus on all
communities.
Quijotekaffee has managed to develop a successful relationship with its 10 cooperatives. They
guarantee minimum pricing i.e. 335 US$ per hundredweight of green coffee Arabica. They also
provide interest-free financing of harvest, 60% when the contract is signed and the remaining
40% when shipment documents are received. The relations are kept healthy by visiting co-ops
yearly.

Societal culture

This component acknowledges the firm's impact on society as a whole.

Quijotekaffee's strong corporate social responsibility practices can be interpreted as cultural
accountability.

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Scale of Outreach

This describes the relationship the firm has with its stakeholders. This may include long-term
relationships and outreach programs.
For Quijotekaffee, the scale of outreach is operations in six countries, ten co-ops and its
educational initiatives, including a school that provides training in roasting and barista skills:
catering to individuals ranging from beginners to professionals.

End-User

End-User is the person who consumes the product, the end-user does not have to be a customer.
As Joyce and Paquin (2016) explain, textbook publishers consider teachers as consumers when
students are end-users.
For Quijotekaffee, end users are private customers and businesses who consume the coffee.
They provide value by meeting the needs in terms of taste and sustainability.

Social Impact

This component addresses the social cost of the firm. It complements and extends the financial
and environmental costs of the economic and environmental layer.
For Quijotekaffee, pinpointing social impacts can be a challenging task due to their
transparency, commitment to the social layer and constant need for improvement.

Societal Benefits

The Positive social value-creating aspect of the firm is called social benefit. This component
considers the social benefits that come from the firm.
Apart from all the aforementioned social benefits Quijotekaffee has chosen not to reduce costs
for Black Friday 2023 as they will donate any extra revenue earned to a bicycle courier
collective "Fahrwerk". To support collective structures and promote more sustainable shipping
concepts.

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 Local Communities Governance Social Societal End-User
Sustainable Non-Hierarchical Value Culture Business
harvesting methods. No capitalist Develop Strong CSR Private
Regular visits. mindset. long term
T relations.
Employees Guaranteed Scale of
Same Wage. price. Outreach
Regular training. 6 countries.
Make decisions 10 co-ops.
together. Schools

Social Impacts Social Benefits

Donations
Improving other businesses.
Figure 3: The Social layer of the triple layered business model canvas demonstrates the
Quijotekaffee case.

Conclusion

In conclusion, Quijotekaffee is a very sustainability-oriented company in the coffee industry.

They prioritise transparency, value long-term relationships and ensure that profits are shared
equitably. This is proven by analysing the company through the lens of the TLBMC, which
provides visibility in the supply chain by looking into every component.
No matter how sustainable there is always room for improvement. In the areas of transparency,
the website lacks transport emission data and there is less clarity about resource usage from the
co-ops. These suggestions were possible by the use of the TLBMC to analyse how sustainable
the supply chain practices are.
Finally, we can see that economic success can coexist with ethical and environmental practices.
The drive Quijotekaffee has to have a sustainable business model should be an example for
other companies to do the same.

Reference
Barnosky, A.D., Hadly, E.A., Bascompte, J., Berlow, E.L., Brown, J.H., Fortelius, M. and

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 Martinez, N.D. (2012), “Approaching a state shift in Earth’s biosphere”, Nature, Vol.
486 No. 7401, p. 52.

Bilfield, A. (2022). Brewing Sustainability in the Coffee and Tea Industries: From

Producer to Consumer. Routledge Taylor & Francis Group.

DLH. (n.d.). Decarbonization. DHL. Retrieved November 20, 2023, from

https://www.dhl.com/de-en/home/insights-and-innovation/thought-leadership/trend-

reports/supply-chain-decarbonization.html

Ilgar, O. (2022, September 29). The Sustainability Problems Percolating In The

Coffee Supply Chain. Forbes. Retrieved November 14, 2023, from

https://www.forbes.com/sites/sap/2022/09/29/the-sustainability-problems-percolating-

in-the-coffee-supply-chain/

Joyce, A., & Paquin, R. L. (2016). The triple layered business model canvas: A tool to design
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Nawon. (2023, September 19). Top 10 world's most consumed beverage. Nawon.

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consumed-beverage/

Osterwalder, A., & Pigneur, Y. (2010). Business Model Generation: A Handbook for
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from https://www.quijote-kaffee.de/%C3%BCber-uns/

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